How much of the robot has to be animal before working it that hard is cruelty to the animal?

This has a very little to do with the tissue and more to do with the rewarding system. Cutting in flesh is not considered to be wrong unless the flesh is connected to a functional brain. If you want to read something that explores this in more depth the you can probably find something from Asimov. The first season of the anime Gunslinger Girl also deals with this a bit.

TL;DR; It is not cruel to let a robot work until it wears out or breaks, biological or not. It is however cruel to program said robot to fee

"Is not considered to be wrong"? Perhaps by you Anonymous Coward. The issue of live, even autonomous, animal tissue without animal nerves is pretty new, and far from settled. Asimov's half-century old work, from before anyone had any actual experience with any of these innovations, and a cartoon, aren't the final words on the matter.

The point is that the boundaries of "robot" are now fuzzy, and categorical statements like "biological or not" are invalid.

TL;DR; It is not cruel to let a robot work until it wears out or breaks, biological or not. It is however cruel to program said robot to feel pain when it wears out/breaks and then force it to do so.

I suppose it depends on how you define 'cruel'. In a strict sense, engineering humans or other sentient beings to delight in sacrificing themselves for your pleasure* would not be 'cruel', because you are not causing physical pain or suffering. But I believe most would consider such a thing to be deplorable and the product of a cruel and sociopathic mind.

My issue with bio-inspired designs like this is that are are surely susceptible to the same vulnerabilities as humans. One of the benefits of robots is that they can be sent to places humans would not otherwise go, such as deep space, extremes in temperature, and so on. What is the point? Why do we need a copy of a human, other than the obvious cool insights such research provides of course.

We haven't nanomachines yet that can do for robots what organic tissue can do for humans: Heal. A robot with a damaged servo needs a replacement. We either build the robot with lots of redundancy (have a colony of robots) and get them to fix themselves from scraps, manufacture themselves, or make them more independent -- just allow their injury to heal. Nature shows this is more advantageous when spare parts can not easily be acquired.

They aren't trying to duplicate humans. They are trying to distill and reproduce essential aspects of biomotion e.g. skeletal muscle contraction. TFA is about a way to control the twitching of skeletal muscles without requiring a biological nervous system.